$1 billion project of Dubai’s Largest Indoor Theme Park

Of all the achievements that Dubai could claim to have realised since or after the formation of the United Arab Emirates, is this semi-loony $1 billion project of Dubai’s Largest Indoor Theme Park that is not really such a loony one.  It may however seem so at first glance but at a closer look, the city has dramatically changed since dredging of what is called its “creek”, that is a finger of the Gulf sea water coming into the desert shore land.  What followed after that is a succession of more and more amazing developments as decidedly helped by the unprecedentedly ginormous inflow of petrodollars and the accompanying expatriates to service them. 

It would be interesting to follow up on the current Qatar crisis as intimated in our Qatar crisis impacts on the rest of the MENA region and its direct effect on such a project.

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Of all the achievements that Dubai could claim to have realised since or after the formation of the United Arab Emirates, is this semi-loony $1 billion project of Dubai’s Largest Indoor Theme Park that is not really such a loony one.  It may however seem so at first glance but at a closer look, the city has dramatically changed since dredging of what is called its “creek”, that is a finger of the Gulf sea water coming into the desert shore land.  What followed after that is a succession of more and more amazing developments as decidedly helped by the unprecedentedly ginormous inflow of petrodollars and the accompanying expatriates to service them. 
It would be interesting to follow up on the current Qatar crisis as intimated in our Qatar crisis impacts on the rest of the MENA region and its direct effect on such a project.
We feature this article of India Times written by Anjali Bisaria and published on July 8, 2017. 

Dubai’s Largest Indoor Theme Park Costs $1 Billion & Is As Big As 28 American Football Fields

When it comes to building the world’s ‘firsts’ buildings, hotels, or artificial islands, trust Dubai to be ahead of the game, all the damn time!

For Dubai is now home to the globe’s first largest indoor theme park – IMG Worlds of Adventure. Sprawled across 1.5 million square feet with a capacity to hold 30,000 visitors at a time, the $1 billion theme park threw open its doors on August 31, 2016, reports The Independent.  

IMG WORLDS OF ADVENTURE

The size of the theme park equals 28 American football fields which also houses a 12-screen cinema complex with IMAX screen. Its opulence is Dubai’s yet another promise of becoming the country’s entertainment capital.

And by 2019, IMG Worlds of Adventures is expected to see a rise in its revenues by 78% to $837 million!

IMG WORLDS OF ADVENTURE

The park is divided into four zones – MARVEL, Cartoon Network, Lost Valley – Dinosaur Adventure, and IMG Boulevard. There are 22 rides and attractions including the Velociraptor roller-coaster that speeds up to 100 km/h in 2.5 seconds.

IMG WORLDS OF ADVENTURE

IMG WORLDS OF ADVENTURE

Apart from this, visitors can check out 25 shops and 28 restaurants and bars with prices soaring through the sky. Imagine buying a pen worth 115,000 dirhams, i.e., $31,300!

A land that also sees soaring temperatures, this indoor theme park is both a respite and a delight.

 ANJALI BISARIA

JULY 08, 2017

Malls and most exclusive Shopping Centers in the GCC

Shopping generally in the Middle East in 2016 statistics showed despite all predictions, an unabated upward trend and is now being taken fairly seriously by the countries of the GCCs leadership [ . . . ]

Shopping generally in the Middle East in 2016 statistics showed despite all predictions, an unabated upward trend and is now being taken fairly seriously by the countries of the GCCs leadership in their drive towards diversification of their respective economies. In the shopping infrastructure and profusely omnipresent throughout the numerous malls and most exclusive Shopping Centers in the GCC are the top notch locally franchised brands of imported luxury range of clothing, jewelry, shoes, etc. mainly from Europe.
Dubai, for instance has over the years become the ultimate champion city in the range and variety spread of facilities starting with its airport Duty Free area and culminating with its planned Expo 2020.
Meantime, more retail space is being provided in Dubai as well as throughout the GCCs like these  shown here below as the newest 9 malls that were developed and / or completed last year. These are listed according to their size.
  1. Mall of the World, Dubai,
To be fully completed before 2020
  1. Nakheel Mall, Dubai
To be completed this year
  1. Mall of Saudi, Riyadh,
To be completed in 2022
  1. Al Diriyah Festival City Mall, Riyadh
Completion date not known to date.
  1. Mall of Qatar, Doha
Already completed in 2016 and open to the public
  1. Doha Festival City Mall, Doha
Completed and open to the public in 2016
  1. Mall of Oman, Muscat
To be completed in 2020
  1. City Center of Ishbiliyah, Riyadh
To be completed in 2018
  1. The Pointe Mall, Dubai ,
Completed in 2016
An article of TradeArabia of 4 days ago, gives a good account on the latest in the domain and is rpublished here below.

The Middle East eyes luxury shopping tourism crown

London may have recently been named as the world capital for luxury store openings in 2016, but when it comes to a place that is vying to be the ultimate destination for luxury shopping tourism, the Middle East is set to take this crown.

 

Despite cities such as Paris, London and New York, the UAE has established itself as luxury shopping paradise with more than 50 shopping mega malls, regular shopping festivals, and leading designer goods, available tax-free.

 

And thanks to the latest tourism figures, with Dubai alone pulling in 14.9 million visitors in 2016 and Dubai International Airport still being the world’s busiest airport, with expectations of traffic at over 89 million in 2017, this surge of travellers in the region is cementing its appeal as a luxury shopping haven.

 

And other destinations are also rising up the ranks. In Abu Dhabi – the capital of the UAE – guest stays were up by 8 per cent in 2016, with over 4.4 million tourists clocking up a staggering 12 million guest nights, with the UK ranking number one in terms of the amount of tourists visiting from Europe. This increase in foreign tourists represents a new record for the capital of the UAE.

 

In addition to a long list of luxury brands and a wide variety of retail choices, the UAE’s shopping centre’s have also been globally recognised for their distinctive amenities such as one-of-a-kind ski slopes and their proximity to the iconic Burj Khalifa, the tallest building in the world. This also includes Yas Mall, which has been built on an island, and is home to the Yas Marina Circuit which sees record numbers of international visitors attend for the Formula One every year.

 

And when it comes to retailers, it seems the market is also booming. The UAE, is perceived as a key long-term entry market for companies, with many entering the market or expanding their stores in the region, resulting in more intensified competition on the international global shopping stage.

 

With an expertise spanning six decades, one of the leading player’s in the world of beauty, fashion and gifts, The Chalhoub Group, is helping to lead this retail evolution for luxury shopping tourism globally. Its specialty department store, TRYANO in Yas Mall, bears testament to this.

With over 20,000-sq-ft of retail space and a collection of over 250 coveted international and local brands, shoppers visiting the store, which runs across three levels, experience a ‘Sculpture Garden’, a deconstructed ‘Greenhouse’ and the ‘Fountain of Youth’, an interactive digital fountain that comes to life in streams of dancing LED lights that glitter and pulse to echo visitors’ movements

TradeArabia News Service

UAE and India to enjoy stronger trade and cultural ties

The United Arab Emirates (UAE) has a GDP of about $350 billion and a high GDP per capita, but it is a commodity-based economy, with hydrocarbons accounting for 40% of total exports and 38% of its GDP [ . . . ]

The United Arab Emirates (UAE) has a GDP of about $350 billion and a high GDP per capita, but it is a commodity-based economy, with hydrocarbons accounting for 40% of total exports and 38% of its GDP. In its drive towards diversifying its economy and reduce its dependence on oil revenues, the UAE programmed for tourism, financial and construction sectors to receive most of its investments. Meanwhile, manufacturing activity accounted for 42% of output growth, transport and communication for 23%, wholesale and retail trade for 16.5% and catering and hospitality for 15.5% whilst construction and agriculture contracted these last 2 years. All of these activities are manned by active populations which according to all governments agencies and local media are made of more than 85% of expatriate population with 71% mostly Indian. The UAE and India to enjoy stronger trade and cultural ties further have to come together in a range of agreements .

Arabian Business.com  came up on Monday, 13 March 2017 with this article by Hamad Buamim, thus providing an idea as it were from the inside to show where the UAE’s heart lies hence the subject of the proposed article on tying ever more closer relationships with India. Like all countries of the GCC, the UAE has some difficulty in accepting to apply some sort of minimal fair ‘Equal Opportunity’ treatment to all their residents, if only to sedenterise them better. It must however be said on this chapter, the UAE have prominently shown the way, by being at the forefront of the other members of the GCCs.

Why the UAE is forging closer ties with India

[ . . . ] The UAE and India have enjoyed strong trade and cultural ties that date back more than a century. This unique relationship has strengthened in recent decades amid an increase in bilateral trade and investment. Non-oil trade between India and Dubai has accounted for the largest volume of trade, amounting to $19bn in the first nine months of 2016, and solidifying India’s position as the emirate’s second-largest trading partner.

The Indian business community in the UAE has contributed significantly to bilateral relations and trade. In fact, 29 percent of all new companies that registered with Dubai Chamber last year were Indian, bringing the total number of Indian members to over 36,000. At the same time, India remains one of the top export markets for Dubai Chamber members, with exports and re-exports to the country growing steadily in recent years to reach $1.7bn by the end of 2016.

Yet, we see huge potential within India’s fast-growing economy that has yet to be explored. The two countries share many synergies, especially within the areas of agriculture, pharmaceuticals, manufacturing and metals.

The world’s fifth-largest economy has renewed its focus on foreign trade, while it has also outpaced China in exports of locally made retail and lifestyle products. At the same time, it has stepped up efforts to strengthen its economic cooperation with the UAE in the areas of agriculture, food security, energy, defence, technology and healthcare.

India has put forth a clear roadmap to fuel future economic growth that places a major emphasis on expanding its infrastructure and boosting foreign direct investment. The country is building several cluster cities and recently opened its first international finance services centre in Ahmedabad. New policies are also focussed on turning India into a manufacturing hub for pharmaceutical and medical products under the “Make In India” initiative.

There are also exciting new technologies that India is embracing, such as blockchain, which has now been successfully tested by the country’s central bank.   Smart city concepts are also gaining momentum and the adoption of innovative solutions stands to make the country a major hotspot for smart city developments.

As a country that has excelled in rapidly expanding its infrastructure and economy, I believe that the UAE can offer the right level of expertise and investment needed to meet growing demand within India and help turn the country’s ambitions into a reality. [ . . . ]

Dubai’s infrastructure and liberal government policies

According to the Government of Dubai, Dubai has changed dramatically over the last three decades, becoming a major business centre with a more dynamic and diversified economy. Dubai enjoys a strategic location and serves as the biggest re-exporting centre in the Middle East. Low logistical and operational costs and Dubai’s infrastructure and liberal government policies attract investors in a big way. Activities such as trade, transport, tourism, industry and finance have shown steady growth and helped the economy to achieve a high degree of expansion and diversification. This government in its policy of diversification away from oil of the country’s economy has pledged that trade, transportation, communication, and financial services business though moderate throughout 2016 would most probably gather pace 2017. In the meantime, its flag carrier Emirates, refer our article Brexit and the Emirates Airline, seems lately to encounter some difficulties as highlighted by the following Bloomberg’s article : Is Emirates Airline Running Out of Sky?

According to the Government of Dubai, Dubai has changed dramatically over the last three decades, becoming a major business centre with a more dynamic and diversified economy. Dubai enjoys a strategic location and serves as the biggest re-exporting centre in the Middle East.   Low logistical and operational costs and Dubai’s infrastructure and liberal government policies attract investors in a big way. Activities such as trade, transport, tourism, industry and finance have shown steady growth and helped the economy to achieve a high degree of expansion and diversification.

This government in its policy of diversification away from oil of the country’s economy has pledged that trade, transportation, communication, and financial services business though moderate throughout 2016 would most probably gather pace 2017.

In the meantime, its flag carrier Emirates, refer our article Brexit and the Emirates Airline, seems lately to encounter some difficulties as highlighted by the following Bloomberg’s article.  Excerpts of it are reproduced here.

The above image is of Photographer Greg White for Bloomberg Businessweek.

Is Emirates Airline Running Out of Sky?

It flies the fanciest product on the biggest planes on the longest routes. There might not be much more room to soar

[. . .] Dubai International runs at full speed 24 hours a day to help Emirates serve a network that spans from Buenos Aires to Christchurch, New Zealand.

by Matthew Campbell on January 5, 2017, 5:01 AM GMT

The airline, which is based in Dubai and owned by its government, has become the world’s largest long-haul carrier by never relaxing its grip—on employees, on airplane manufacturers, or on its own ambitions. Emirates recently configured a plane to seat 615 passengers, a record, and flies the world’s most epic nonstop route, an 8,824-mile arc from Dubai to Auckland. Emirates is essentially the only buyer of the largest commercial airliner, the Airbus A380, which it gilds with stand-up cocktail bars and in-flight showers. For every flight departing Dubai, as cabin crew head to their airplanes, the last room they traverse is a hall with mirrors on one side and windows to the tarmac on the other. The space allows workers to inspect themselves for perfection against a backdrop of government-owned taxiways thick with Emirates jets. That’s the airline, in one image: glamour and ambition in a framework of absolute control. . .

 

Since 1985, Emirates has grown from a two-plane operation at a desert airstrip into a force whose every movement rumbles through global aviation. The airline’s growth is inseparable from that of Dubai, with both straining the laws of financial and physical gravity. The company’s chairman is Sheikh Ahmed bin Saeed Al Maktoum, the uncle of Dubai’s absolute monarch. He also runs the airport authority, the aviation regulator, and the city’s largest bank, should Emirates ever need a loan. Out in the desert, a half-hour drive from the coast’s skyscrapers and malls, the government is building a $32 billion, five-runway megahub precisely to Emirates’ specifications. Its ambitions are consonant with its name: Dubai World Central. The project will have a capacity of 220 million passengers per year, four times the number that New York’s John F. Kennedy International Airport serves today. Two-thirds of humanity lives within the radius of an eight-hour flight. Among industry veterans, the airline’s rise inspires a respectful awe. “Emirates is unprecedented,” says Tony Tyler, a former chief executive officer of Hong Kong’s Cathay Pacific. “There’s never been anything as huge.”

Yet as Emirates dictates new standards of technology, luxury, and range, it’s finding that more and more is beyond its mastery. Conceived as a titanic bet on the growth of what development economists call the Global South—the Middle East, Africa, South Asia, and Latin America—the airline is at risk if those emerging markets don’t, in fact, emerge. Emirates in May reported its first-ever annual revenue decline and is cutting some of its plans for growth amid slackening demand from sub-Saharan Africa, Turkey, and Brazil. The slump has industry analysts wondering how Emirates will fill the staggering number of planes it has on order. The company has agreed to buy 50 A380s and 174 Boeing 777s, adding to the 92 and 148, respectively, it currently flies. By comparison, British Airways operates 12 A380s, and American Airlines, Delta, and United have zero.

 

The bigger threat may lie in the U.S., the world’s most lucrative travel market, where Emirates has been expanding aggressively. It flies to 11 cities, including Orlando, Boston, Seattle, and Dallas. Led by Delta, the U.S. Big Three are intensifying a lobbying campaign against Emirates and its smaller Persian Gulf rivals, Etihad Airways and Qatar Airways, collectively the ME3, seeking to curtail their access to American airports unless “unfair subsidies” are eliminated. Their argument, that deep-pocketed foreigners are threatening American jobs by flooding the market with subsidized capacity, was once seen in business circles as a long shot—but it happens to resonate precisely with President-elect Donald Trump’s stated view of the world. Similar efforts are afoot in Europe.

Those challenges may make the world less hospitable than ever to a company whose marketing projects a sunny globalism. With Trump and his ilk ascendant, one Emirates ad sums up a corporate ethos that feels increasingly at odds with the times: “Tomorrow thinks borders are so yesterday.” . . .

 

Iran moves to opening up for GCC’s businesses

The proposed article of Paul Ebeling’s on Iran moves to opening up for GCC’s businesses would be best to be prefaced by an introduction to a respectable retrospective of modern Iran as it is striving to pick up speed after coming out of the darkness of years of sanctions. Read more in A History of Modern Iran . In a radical reappraisal of Iran’s modern history, Ervand Abrahamian traces Iran’s traumatic journey across the twentieth century, through the discovery of oil, imperial interventions, the rule of the Pahlavis, and, in 1979, revolution and the birth of the Islamic Republic. In the intervening years, Iran has experienced a bitter war with Iraq, the transformation of society under the rule of the clergy, and, more recently, the expansion of the state and the struggle for power between the old elites, the intelligentsia, and the commercial middle class. The author, who is one of the most distinguished historians writing on Iran today, is a compassionate expositor. While he adroitly negotiates the twists and turns of the country’s regional and international politics, at the heart of his book are the people of Iran, who have endured and survived a century of war and revolution. It is to them and their resilience that this book is dedicated, as Iran emerges at the beginning of the twenty-first century as one

The proposed article of Paul Ebeling’s on Iran moves to opening up for GCC’s businesses would be best to be prefaced by an introduction to a respectable retrospective of modern Iran as it is striving to pick up speed after coming out of the darkness of years of sanctions.  Read more in A History of Modern Iran .  

In a radical reappraisal of Iran’s modern history, Ervand Abrahamian traces Iran’s traumatic journey across the twentieth century, through the discovery of oil, imperial interventions, the rule of the Pahlavis, and, in 1979, revolution and the birth of the Islamic Republic.  In the intervening years, Iran has experienced a bitter war with Iraq, the transformation of society under the rule of the clergy, and, more recently, the expansion of the state and the struggle for power between the old elites, the intelligentsia, and the commercial middle class.  The author, who is one of the most distinguished historians writing on Iran today, is a compassionate expositor.  While he adroitly negotiates the twists and turns of the country’s regional and international politics, at the heart of his book are the people of Iran, who have endured and survived a century of war and revolution.  It is to them and their resilience that this book is dedicated, as Iran emerges at the beginning of the twenty-first century as one of the most powerful states in the Middle East.  

Iran is open for business, what does it mean for GCC companies?  

In January this year, senior diplomats from around the world formally announced the lifting of sanctions against Iran. In principle this put a definitive end to 37 years of various degrees of sanctions imposed on the country.

Boardrooms of global Fortune 500 companies and regional conglomerates alike have been lit up with debate on what this means for their business over the past 10 months, but two things are certain.

1st, the opening up for the nation to the world is arguably one of the most prolific global business opportunities of our generation.

2nd, the answer to the above question depends heavily on your company’s origin, DNA and risk appetite.

For the majority of the largest European and Asian companies excluding China, this marks a much-awaited opportunity to return to Iran, where many had investments, manufacturing facilities and large-scale operations prior to the financial sanctions made against Iran in 2011.

Chinese and American companies view the current situation as more of a threat, and for different reasons.

Chinese firms have greatly benefited from the international sanctions on Iran over the past few years, which provided a window where an inflow of Chinese products flooded the market without much foreign competition. The lifting of sanctions will see an inevitable curtailing of Chinese dominance in this market.

For American companies, the situation is more complicated.

Although US companies’ foreign subsidiaries are technically allowed to engage with Iran, there is still a minefield of regulatory, transparency and legal challenges that have left many hesitant to take even preparatory steps.

Furthermore, the fact that 2016 is a US Presidential election year, and the mounting layers of uncertainty of the future government’s policies towards Iran have left the majority of American companies unable to decide.

So, what does Iran opening up mean for GCC players?

There are both significant opportunities and many challenges, and to understand the complex nature of GCC-Iran ties we must first understand how Iran fits into the macro-economic fabric of the Middle East.

Iran: what’s the big deal?

The excitement felt by foreign companies can be understood when you look at Iran’s economic indicators.

Iran isn’t a stereotypical sanctioned economy, which might be perceived to be underdeveloped. On the contrary, the economy is more diversified than most emerging economies today, and is substantial in size across various indicators.

Despite the sanctions, Iran has maintained the 26th largest GDP in the world at $425-B, between Saudi Arabia (20th at $646-B) and the United Arab Emirates (31st at $370-B). It generates 1.5% of global GDP and is the only country that exported in every single category of exports, as defined by the IMF in 2012-2013.

Iran also boasts a population of nearly 80-M inhabitants, which is equivalent to the population of all 6 GCC countries combined. With a burgeoning middle class, Iranian consumers increasingly have disposable incomes. Moreover, Iran’s predominantly young population is amongst the most highly educated in the region, with 13.3% of the working population having graduated from university.

The country has the highest literacy rates in the region and is the 5th largest producer of engineers worldwide.

Like some of its GCC neighbors, Iran is blessed with natural resources, and in abundance. Iran has the world’s 4th largest proven Crude Oil reserves (4% global share) and the world’s 2nd-largest proven Nat Gas reserves (17.5% global share).

Iran is the world’s 12th largest Crude Oil exporter, as of 2015, and is expected to climb as it increases production.

Souq Iran
Souq Iran

But unlike its GCC neighbors, Iran has managed to build a diversified economy that does not rely solely on its Crude Oil and Nat Gas industry. Though Oil-based revenues still provide 25% of the country’s GDP, the automotive, mining and manufacturing, and agriculture sectors each also command 10% of the economy.

As the national GDP breakdown infers, Iran is blessed with many natural resources besides Oil and Gas; the country holds over 7% of the world’s total minerals. Iran has the largest global zinc reserves and the largest copper deposits and is a large global supplier of iron ore and chromite.

Iran is currently home to the 20th largest automotive manufacturing hub in the world, having produced approximately 1.4-M units in 2015.

Iran is expected to become the biggest market for new car sales in all of the Middle East and North Africa (MENA) by 2020. This translates into big opportunity for automotive manufacturing and automotive aftermarket players in the region.

Elsewhere, the country’s construction sector is still expected to continue at a relatively strong and steady growth rate of 6.1% CAGR from 2016 to 2020.

Driven primarily by residential construction projects, Iran’s construction market is expected to reach $196-B by 2020. Iran is the 13th largest steel producer in the world, and is also the 4th largest cement producer, behind China, India and the USA.

Beyond Iran’s impressive industries, the country’s strategic geographic positioning between Europe, the Middle East, South Asia, and the Far East also works in its favor. And it seems this is more relevant than ever before, as talks of reviving and modernizing the old ‘Silk Road’ trade routes between Asia and Europe have intensified in recent months.

Business opportunities

Iran’s large market spells big opportunity for GCC businesses, which have a number of advantages over global competitors.

The 1st of these advantages is geography.

It comes as no surprise that most Fortune 500 companies that are entering Iran are predominantly doing so via the UAE or Turkey – primarily due to proximity and logistical ease, as well as ease of communication, travel and management of business operations.

Secondly, the GCC has already established grey channels into Iran.

Many foreign companies are surprised when they first visit Iran and realize the market is flush with their products and the products of all their competitors. The UAE and the wider GCC have acted as Iran’s unofficial backdoor during the sanctions, and distribution and supply chain channels are already carved out in these markets. The challenge will be to keep these channels open once official channels are developed.

3rd and perhaps most importantly, companies in the Gulf know how to operate in volatile and high-risk emerging markets. This is why many GCC companies have done well in emerging Asia and Africa. Due to the ability of GCC companies to take these risks, regional companies have an opportunity to enter Iran faster than their foreign rivals.

Finally, there are a number of sectors where GCC companies are primed to flourish.

For starters, the bank and financial sectors in the GCC are expected to witness an increase in longer-term business opportunities. The region’s top construction players which may be suffering from the contraction of the sector at home might also find a welcome respite in Iran.

Construction growth in the country is primarily driven by the residential segment – accounting for 45% of the market – due to a severe shortage of housing stock. The demand stands at 1.5-M housing units per year, of which Iran is able to provide less than 50%.

Infrastructure projects and construction of manufacturing plants are also expected to see sharp growth rates that cannot be met with local capacity alone.

Thus, all adjacent industries, from the excavators and heavy machinery sector to the construction materials sector, will be prime growth segments.

iran-industry-skyline

Potential risks

iran-industry-skyline

Opportunities outweigh the risks in most instances for GCC companies, but there are still risks and restrictions to be aware of.

First and foremost, opening Iran to the world will mean that Iranian industries will begin to compete more fiercely with Gulf businesses. Major industries where Iran and the GCC will compete include Oil and Gas, petrochemicals, aluminum, machines, engines, pumps, and dairy products.

In Oil and Gas exports, for example, Iran will directly compete with Saudi Arabia, the UAE and Qatar to become the energy importer of choice with lucrative Oil-importing nations such as China, Japan, South Korea and India, as well as Europe. This will be an ever-growing challenge, as Iran is the only country in the world as cost-effective as Saudi Arabia in Oil and Gas production.

Secondly, Iran will bring fierce competition for FDI (foreign direct investment).

As the Iranian government continues to develop policies that deter foreign entities from becoming an import-only partner to Iran, many large multinationals may decide to build local manufacturing facilities for their regional operations, instead of bringing this investment to the GCC.

Another challenge facing Gulf companies planning to operate in Iran has to relate to the marketing and origins of their products. Though Iranians have a strong demand for European, North American and Japanese products, there is little to no consumer affinity towards products produced in the Gulf or products with Arabic content. This may require many Gulf companies to invest in re-branding their products entirely to enter this promising neighboring market.

Iran’s regional gateway

The UAE has the highest trade exchange with Iran amongst its GCC peers, earning over $32-B in export value in 2014, and over $8.7-B in Q-1 of 2015 alone. The emirates accounts for more than 80% of Iran’s trade with the whole of the GCC.

Oman is the 2nd major GCC trade partner.

Many analysts suggest that the removal of sanctions on Iran will have a positive effect on the UAE economy over time, with trade between the countries likely to increase between 15-20 per cent. The International Monetary Fund (IMF) forecasts that $13bn will be added to the UAE’s economy as trade between the two countries steps up between now and 2018.

Some have argued that Iran opening up could see jobs move from the UAE directly to Iran, but the majority of Iran’s imports are likely to continue to go through Dubai’s Jebal Ali Free Zone Port.

Furthermore, Iranian businesses have a major presence in the UAE, with around 8,000 Iranian traders and trading firms registered in the emirates, according to the Iranian Business Council. Ethnic Persians are estimated to account for roughly 10 per cent of Dubai’s population of two million. The UAE also has a strong commercial presence in Iran, with leading companies such as RAK Ceramics, Majid Al Futtaim Group and Mammut Building Systems operating there.

Diplomatic and commercial relations

Iran and the GCC countries have economic incentives to expand their trade relations, but diplomatic and geo-political concerns are likely to play an important role as well.

Looking specifically at relations between Iran and the UAE, there exists one major unresolved conflict between the two countries. The UAE has challenged Iran’s sovereignty over three islands in the Arabian Gulf. In addition, the UAE’s close economic and political ties with Saudi Arabia led to the emirates downgrading diplomatic ties with Iran following the storming of the Saudi Arabian embassy in Tehran in January of this year.

Oman and Iran share close diplomatic, economic and military ties, upholding a tradition of cooperation that dates back to the Shah of Iran’s regime. The sultanate played a key role in the 2013 secret talks between the US and Iran, which paved the way to the current removal of sanctions.

Oman also signed an accord with Iran in early 2014 to construct a $1-B Nat Gas pipeline from Iran to Oman.

Qatar and Kuwait also have close relations with Iran; all three are members of OPEC, the Non-Aligned Movement, and the Organisation of the Islamic Conference. The two countries also generally refrain from criticizing Iran’s domestic and foreign activities.

Bahrain and Saudi Arabia are the two GCC states that have the most strained relationship with Iran. Bahrain-Iran relations have been under pressure since the Iranian Revolution and the 1981 discovery of a planned Iran-sponsored coup. However, in recent years, Bahrain has begun taking steps to improve relations.

Its relations with Saudi Arabia’s have been troubled, as both countries aspire for a leadership role in the Islamic world. The political differences between Riyadh and Tehran are stark, with little sign of rapprochement in the near future.

That said, there has been some economic activity between the two rival countries. Trade stood at a mere $215-M in 2015, mainly comprised of Iranian exports, but look closely and you can find a small number of notable Saudi businesses either directly or indirectly established in Iran via official distribution channels.

These include strategic investment holding group Savola Group, SABTEC,  a subsidiary of Saudi Arabia’s largest public company SABIC, fast food chain Al-Baik, Saudi Ceramics Company, and Al Abdulatif Carpets.

In summary

While entering Iran might not necessarily be straight-forward, right or possible for every business in the GCC, its opening up to the world is one of the most significant global business opportunities of our generation, it is one many businesses in the Gulf should at least consider.

Erika Masako Welch, business development director for the Middle East at Solidiance

Paul Ebeling, Editor

 

 

UAE Strategy for the Future

Dubai offers itself a UAE Strategy for the Future

UAE Vice President and Prime Minister of the UAE and Sheikh Mohammed Al Maktoum, Ruler of Dubai have launched the UAE Strategy for the Future, designed to bring the country to its next era of development with future prototypes for sectors of healthcare, education, social development and the environment to be developed.
According to the Dubai Media Office, there will be a programme to “steer the nation’s transformational growth by identifying the needs and challenges of the future”, address them through “impactful long-term plans” and phase their implementation in 3 short, medium and long-term duration, with benchmarks and performance indicators for each. The Dubai ruler having particular interest in the future readiness of Dubai, has earlier this year, launched the Future Accelerators programme with the intention of deploying certain futuristic prototypes across the city.
“As a nation, we have always been forward-looking and planning for the future, which

Dubai offers itself a UAE Strategy for the Future

UAE Vice President and Prime Minister of the UAE and Sheikh Mohammed Al Maktoum, Ruler of Dubai have launched the UAE Strategy for the Future, designed to bring the country to its next era of development with future prototypes for sectors of healthcare, education, social development and the environment to be developed.

According to the Dubai Media Office, there will be a programme to “steer the nation’s transformational growth by identifying the needs and challenges of the future”, address them through “impactful long-term plans” and phase their implementation in 3 short, medium and long-term duration, with benchmarks and performance indicators for each.  The Dubai ruler having particular interest in the future readiness of Dubai, has earlier this year, launched the Future Accelerators programme with the intention of deploying certain futuristic prototypes across the city. 

“As a nation, we have always been forward-looking and planning for the future, which has been a key driver of our success. The UAE Strategy for the Future is our new approach to planning for the future by predicting, analysing and implementing highly effective action plans that accelerate development,” said Sheikh Mohammed.

“The strategy serves as the referral point for governmental departments to adopt proactive future planning to usher in an even more prosperous tomorrow for our current and future generations. To achieve its goals, we must work together and share responsibilities. With our future planning model, we will serve as a model for the world. “The citizens of the UAE are our most important resource in building our future. To nurture their skills, we will strengthen education and training initiatives.”

The Dubai Media Office mentioned above has published its programme in its website; we reproduce extracts of it here.

dubai-2021-plan

Dubai Plan 2021

“Dubai Plan 2021” reflects the vision of Vice President and Prime Minister of the UAE and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum and builds on the success of the “Dubai Strategic Plan 2015”.

“Dubai Plan 2021” aims to reinforce Dubai’s position as a global centre and destination for a number of industries and sectors as part of which it has launched several major global initiatives and hosted several global events. In November 2013, Dubai won the right to host the World Expo in 2020. Other major projects that demonstrate Dubai’s leadership include an initiative to transform Dubai into the’Capital of the Islamic Economy’, and the launch of the Dubai Smart City strategy.

Dubai Plan 2021 was developed over the period of a year by teams of representatives from various entities of the Government of Dubai. In addition, various segments of the society, particularly the youth, took part in workshops and interactive platforms that allowed them to participate in shaping the future of the city. The team working on developing the Dubai.

Plan 2021 researched theoretical models for the development of cities. The team also benchmarked Dubai against various cities that are similar to Dubai geographically, economically, and socially and that compete with it for global leadership.

The plan comprises 660 key performance indicators that measure the achievement of the objectives and goals of the Plan in line with the national agenda and the UAE’s goal to be “Number 1” in all fields.

Dubai Plan 2021 is divided into 6 themes, each highlighting a group of strategic developmental goals for Dubai. Together, they form the city’s vision for 2021.

1- A City of Happy, Creative & Empowered People

Aims

Educated, Cultured and Healthy Individuals:

Individuals who take care of their own wellbeing and that of their family through proactive measures to manage their health and enhance their skills and ability to contribute to the economy and society of Dubai, building on their solid education and cultured upbringing.

Productive and Innovative in a Variety of Fields:

Individuals who strive to succeed, are financially self-sufficient, and embody the mindset and disposition of entrepreneurs and responsible citizens.

Happy Individuals Proud of Their Culture:

Individuals who are generally satisfied with their life in Dubai, confident about their future and proud of their cultural origins.

Are The Cornerstone for Dubai’s Development across all fields:

Emirates men and women playing an important role in the development of Dubai and filling critical roles across various sectors including social, economic, and urban.

2-An Inclusive and Cohesive Society

Aims

A Vibrant and Sustainable Multi-Cultural Society:

A population that is economically and demographically sustainable and for which multiculturalism is a source of strength and pride.

A Tolerant and Inclusive Society Embracing the Civic Values of Dubai:

A society in which people are treated equally and fairly and share a set of core civic values including tolerance, and personal responsibility.

Cohesive Families and Communities Forming the Bedrock of Society:

Families and communities that provide nurturing environments for personal development, including the raising of children inculcated with core values of personal responsibility, creativity and tolerance.

3- The Preferred Place to Live, Work & Visit

Aims

A City with the Best Educational, Healthcare and Housing Services Catering to Everyone’s Needs:

High quality housing, education, and healthcare services that are accessible for each socio-economic segment of society and a globally competitive cost of living.

Vibrant and Active, Providing a Rich Cultural Experience and Globally Distinctive Entertainment Outlets:

Dubai offers a diverse set of cultural and recreational options, including green spaces, beaches, sporting facilities, entertainment options and cultural experiences making it an attractive and entertaining city for residents and a popular destination for tourists.

The Most Secure Place:

A feeling among residents and workers living in Dubai and tourists visiting Dubai, that the city is a safe and secure place to be and that any personal security concerns are dealt with efficiently and transparently by law enforcement authorities.

4- A Smart & Sustainable City

Aims

A Smart, Integrated and Connected City

The infrastructure that supports the economic and social life of Dubai as a city matches world-class levels of efficiency and citizen accessibility, and that allows for future growth of the city.

Sustainable with its Resources:

A city that uses its resources sustainably over the long-term and in line with international best practice levels in terms of consumption, efficiency, and management, and in its dependence on renewable energy sources.

Environmental Elements are Clean, Healthy and Sustainable:

Dubai enjoys a clean and healthy environment in all its elements and ensures its sustainability in the long-term, and in line with the world’s best practices.

A Safe and Resilient Built Environment:

Safety standards across the built environment — including building and transport safety codes and emergency services and crisis/ disaster response capabilities — that match international best practices.

A Pivotal Hub in the Global Economy

Aims

A City that Enjoys Sustainable Economic Growth:

Economic growth that is resilient to disruptive shocks because it is underpinned by a diversified base of economic activity, innovation in business models and increasing productivity of labor and capital.

One of the World’s Leading Business Centres:

Consistently ranked as one of the top 5 global centers for trade, logistics, tourism and finance as well as internationally recognized as the leading financial and trading center at the heart of the Islamic economy.

The Most Business Friendly City and a Preferred Investment Destination:

Dubai is the preferred investment destination for foreign capital, and takes its position as the most business friendly city in the world.

A Pioneering and Excellent Government

Aims

Proactive and Creative in Meeting the Needs of Individuals and Society as a Whole:

The government is forward-looking, proactively listening to and engaging all stakeholders, to ensure that its policies and services meet the needs of individuals and society as a whole, in the present and the future. It also aims to simplify the lives of people through the provision of smart, high quality government services reflecting the individual activities and institutional requirements.

Sustainable and Innovative in the Management of its Resources:

The Government of Dubai adopts a culture of innovation and excellence in its approach to the management of public finances in a manner that sustainably supports city development and environmental friendliness, and human resource practices that ensure the accumulation and continuity of knowledge and experience for the government.

Transparent and Reliable:

The Government of Dubai ensures a fair and reliable application of all laws and regulations in order to preserve the rights of the individuals and institutions. It is also committed to adopting a transparent approach in the development and implementation of all policies, legislation and services.

Further reading and for more information, please consult Dubai Media Office.

Putting people at the heart of city sustainability

In a report titled SUSTAINABLE CITIES INDEX 2016 : Putting people at the heart of city sustainability, Arcadis, a global design and consultancy firm released this report on the most sustainable cities in the world. The PDF formatted report of Arcadis said it ranked 100 global cities across three sectors of sustainability — “People, planet and profit.”
In the same report however, Doha, Qatar is found as ‘not’ or the least environmentally sustainable form amongst the GCC countries. In effect, Doha came in at 72nd out of 100 cities in this year’s Sustainable Cities Index, compiled for Arcadis by UK-based economic consultancy Centre for Economics and Business Research (CEBR). Last year, the country’s capital ranked 41st out of 50 cities in the same index.
Generally, the Middle East did not fare well on the global sustainability scale, and of the eight cities in the Middle East included in this year’s study, Doha fared the worst in the region because of its ‘green factors’ while ranking in the middle in terms of regional sustainability.

In a report titled SUSTAINABLE CITIES INDEX 2016 :  Putting people at the heart of city sustainability, Arcadis, a global design and consultancy firm released this report on the most sustainable cities in the world.  The PDF formatted report of Arcadis said it ranked 100 global cities across three sectors of sustainability — “People, planet and profit.”

In the same report however, Doha, Qatar is found as ‘not’ or the least environmentally sustainable form amongst the GCC countries.  In effect, Doha came in at 72nd out of 100 cities in this year’s Sustainable Cities Index, compiled for Arcadis by UK-based economic consultancy Centre for Economics and Business Research (CEBR).  Last year, the country’s capital ranked 41st out of 50 cities in the same index.

Generally, the Middle East did not fare well on the global sustainability scale, and of the eight cities in the Middle East included in this year’s study, Doha fared the worst in the region because of its ‘green factors’ while ranking in the middle in terms of regional sustainability.

Dubai took the top spot and came in 52nd position globally, followed by its Emirati neighbour Abu Dhabi.  Refer to the table below for the Middle East cities ranking in Arcadis’s report.

City and country Middle East ranking Global ranking
Dubai, UAE

1

52

Abu Dhabi, UAE

2

58

Kuwait City, Kuwait

3

70

Doha, Qatar

4

72

Muscat, Oman

5

75

Riyadh, Saudi Arabia

6

76

Jeddah, Saudi Arabia

7

91

Amman, Jordan

8

86

Source: Arcadis

Worldwide, European cities walked away with taking up 13 of the top 15 placements. The Swiss city of Zurich came in first place and Stockholm third, though Singapore came in second.

In the ‘planet’ category, cities were judged across seven factors such as Environmental risks, Energy, Green space, Air pollution, Greenhouse gas emissions, Waste management, Drinking water and sanitation.

But as put in Business Insider UK Arcadis in their report’s “profit sub-index”, ranked all the cities in the world in order of wealth and economic sustainability.  “The 19 most wealthy and economically healthy cities in the world” have amongst them Dubai at the 4th position.